Service Level Agreements (SLAs) are used in companies in many fields including financials services, natural resources such as oil and gas, and others. Service Level Management (SLM) has developed for managing creation and maintenance of SLAs. SLM formalizes the service agreement process between business service customers and Information Technology (IT). SLAs originally applied to agreements relating to equipment. More recently, SLAs have evolved toward agreements relating to overriding business services.
Service providers such Information Technology (IT) providers benefit from agreements with customers regarding quality of service to avoid disputes, allocate resources, and manage costs. However, adoption of SLAs has been limited both in terms of the number of companies implementing service-based service level agreements and the percentage of services that companies govern by service level agreements.
Adoption of Service Level Management (SLM) and Service Level Agreements (SLAs) has been limited by the extensive resource allocation for creating SLAs for the large number, for example hundreds or thousands, of business services that may be covered by a single provider.
Using conventional manual techniques, implementation of agreements across an entire mix of business services can cost companies millions of dollars. Once a service is included in a service catalog, lower impact and higher impact business services are treated the same so that even very low impact business services use a disproportionate amount of resources due to lack of formal prioritization or accountability. Service Level Management was created to solve the resource allocation problem. However, implementation costs continue to limit adoption even though SLAs have the potential for managing operational demand of IT.
Conventionally, SLAs are created by using Service Level Management software that allows Information Technology (IT) to formally capture agreements between the customer and IT. The software manually records the service level criteria developed by service level manager working with a customer so that a substantial labor cost is incurred in creating SLAs. SLAs are created on a case by case basis so that realistic estimates of service quality and budgeting for individual service level agreements are difficult.
In conventional operation, a Service Level Manager (SLM) typically starts a SLA process by collecting service level delivery information for several months and then using the information for negotiation between the customer and an Information Technology (IT) supplier. The SLM can also review usage trending with capacity and availability to develop an equipment plan for a future agreement period. The information is used by the Service Level Manager to negotiate terms with a customer. Once an agreement is in place, the Service Level Manager can report back on the performance of IT for the agreement on a percentage-of-availability delivered during defined hours of operation.
Conventional SLM systems involve high personnel costs for SLA creation. Also, because SLAs are created individually and rarely, overall tradeoffs and costs for multiple business services are not collected. SLAs are commonly created without considering possible alternatives to aspects of business services delivery and resource costs of the various alternatives. SLAs are conventionally created without relating quality of service and cost due to lack of information relating various services. A further difficulty with conventional SLM is that IT organizations and business services typically do not have a common definition of the affect of actual service delivered.